Business Operations - The company discontinued its restaurant business segment in Q2 2024 and now focuses on commercial real estate management, generating $0.56 million in revenue from this segment in 2024[315]. - The company expects continued growth in its commercial real estate management business in the near future[333]. - The company faced significant competition in the commercial real estate market, impacting its ability to lease space and rental rates[319]. - The Company discontinued its restaurant business in June 2024 and transitioned to commercial real estate management, impacting revenue streams[410]. Financial Performance - Revenue from continuing operations for the year ended December 31, 2024, was $563,726, a 74,630% increase compared to $754 in 2023, while petfood revenue dropped to $0 from $0.02 million in 2022[330][331]. - The gross profit for 2024 was $238,422, with a gross margin of 42.29%, compared to a gross loss of $222 in 2023[330]. - The company reported a loss from operations of $1,832,657 in 2024, a 70% improvement from a loss of $6,185,523 in 2023[330]. - Net income for the year ended December 31, 2024, was $2,500,561, a significant recovery from a net loss of $23,631,516 in 2023[358]. - Revenue from the commercial real estate management business increased by approximately $0.56 million in 2024 compared to 2023, with total revenue of $563,726 in 2024[340][361]. - Gross margin improved to 42.29% in 2024 from a negative 29.39% in 2023, attributed to the shift towards commercial real estate management[344]. Revenue and Expenses - The total revenues from continuing operations decreased by $23,971 or 96.95% when comparing 2023 to 2022, primarily due to the discontinuation of the petfood manufacturing segment[334]. - The company’s general and administrative expenses decreased by 45% from $3,145,280 in 2023 to $1,745,247 in 2024[330]. - Operating expenses decreased by $4,114,223 or 66.52% in 2024 compared to 2023, with the ratio of operating expenses as a percentage of revenue dropping from 819,951.18% to 367.39%[346]. - The ratio of cost of revenues as a percentage of revenue was 57.71% in 2024, down from 129.39% in 2023[342]. Cash Flow and Assets - Cash used in operating activities for 2024 was $233,987, a decrease from $2,492,725 in 2023[366]. - As of December 31, 2024, the company had cash and cash equivalents of approximately $15.70 million and short-term investments of approximately $12.95 million[362]. - Total assets increased by 15% from $28,901,397 in 2023 to $33,338,661 in 2024, with cash and cash equivalents rising by 20% to $15,699,562[382]. - Accounts receivable as of December 31, 2024 were $5,748, reflecting a 100% increase from $0 in 2023[388]. - Net property, plant and equipment increased to $2,363,989 as of December 31, 2024, up from $657,124 as of December 31, 2023, representing a growth of 261%[390]. Liabilities and Obligations - The balance of due to related parties decreased by 90% from $1,963,794 in 2023 to $200,318 in 2024[389]. - The Company has total contractual obligations of $2,224,492, with $584,825 due within one year and $1,347,541 due in 1-3 years[394]. - Accounts payable rose by $56,269 to $122,251 as of December 31, 2024, compared to $65,982 as of December 31, 2023, primarily due to commercial real estate accounts payables[391]. - Taxes payable increased by $5,391, or 58%, to $14,681 as of December 31, 2024, from $9,290 as of December 31, 2023[392]. Impairments and Gains - The company recognized a goodwill impairment of $325,832 in 2024 related to the discontinued restaurant business[352]. - The Company recorded an impairment loss of $325,832 for goodwill for the year ended December 31, 2024, compared to $0 in 2023[403]. - The company reported a realized gain of approximately $3.37 million and an unrealized income of approximately $0.44 million from marketable securities for the year ended December 31, 2024[387]. Compliance and Regulatory Matters - The company expects to incur additional costs associated with compliance with the Sarbanes-Oxley Act, which may require seeking other sources of financing[375]. - The company has no off-balance sheet arrangements that require disclosure under SEC regulations[396]. - The company is evaluating the impact of new accounting standards issued by FASB, including ASU 2023-07 and ASU 2023-09, which will require additional disclosures[429][430]. Currency and Economic Factors - The exchange rate for translating RMB to USD for the year ended December 31, 2024, was 7.1884, and for 2023, it was 7.0827, indicating a depreciation of RMB against USD[420]. - The RMB depreciated against the USD by 1.49% in 2024 and by 1.69% in 2023, which may impact the financial results reported in USD terms[529]. - The company does not expect the impact of inflation to be material, with inflation rates in China being 0.8% in 2024, 2.6% in 2023, and 3.7% in 2022[433]. - The company has not engaged in foreign currency hedging and manages price risks through productivity improvements and cost-containment measures[434]. - The company has generally been able to pass on cost increases through price adjustments, depending on market conditions influenced by the overall economic conditions in China[433].
TDH(PETZ) - 2024 Q4 - Annual Report